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American International, AXA and Casualty


Published on 2010-12-10 08:11:27 - Market Wire
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CHICAGO--([ BUSINESS WIRE ])--Today, Zacks Equity Research discusses the Insurance Industry, including: American International Group (NYSE: [ AIG ]), AXA (OTC: [ AXAHY ]) and Casualty Corp. (Nasdaq: [ IPCC ]).

A synopsis of todaya™s Industry Outlook is presented below. The full article can be read at [ http://www.zacks.com/stock/news/44464/Insurance+Industry+Stock+Update+-+Dec.+2010 ]

After enduring stress with respect to pricing pressure and reduced insured exposure through mid-2009, the overall health of the U.S. insurance industry has started improving. Though the market turmoil forced many companies to take immense write-downs, the worst of the crisis appears to be now behind us.

The soft market conditions, along with legislative changes, remain the chief causes for concern for the overall industry at this point. The industry continues to be challenged by the regulatory uncertainties and massive health care restructuring.

Though there are signs of economic recovery, its sluggish pace is expected to continue at least through the first half of 2011. Also, structural economies of scale have pushed the industry toward consolidation. Moving forward, maintaining profitability after complying with the regulatory requirements is not expected to be a painless task.

While enormous financial support from the government helped rescue American International Group (NYSE: [ AIG ]) from collapse, many other firms remain under tremendous pressure or have fallen by the wayside. Competition within the segments of the industry has reduced, which is consolidating through mergers and acquisitions. This has increased market shares of the largest firms.

We expect static growth with persistent soft market conditions, resulting in further consolidation in the industry. However, we expect overall conditions to improve in the second half of 2011, should the economy turn to growth post-recovery.

We remain positive on AXA (OTC: [ AXAHY ]) Infinity Property and Casualty Corp. (Nasdaq: [ IPCC ]) with a Zacks #1 Rank (Strong Buy).

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